Caution must be taken when redesignating Yemen’s Houthi rebels as a terrorist group, UN and Yemeni officials told The National after the decision was announced by Washington.

Secretary of State Marco Rubio said on Tuesday that the US had restored the Houthis to Foreign Terrorist Organisation status, which carries with it sanctions and penalties for anyone providing “material support” for the group.

The decision has raised concern that it could complicate international efforts towards peace. It might also worsen the humanitarian crisis Yemen faces as importers fear being hit with US sanctions if supplies fall into Houthi hands.

"Maximum care must be taken to protect the mediation space to ensure that diplomatic and mediation channels remain open to all parties,” Ismini Palla, representative for the UN envoy to Yemen, Hans Grundberg, told The National.

“The envoy is committed to continue carrying out his duties in accordance with the Security Council mandate to advance dialogue towards a peaceful and inclusive settlement to the Yemen conflict,” Ms Palla said.

Mr Grundberg told the Security Council on Thursday that preserving “the mediation space for the Yemenis” under the auspices of the UN was crucial to reaching a just and inclusive peace. The environment for talks to happen "must be conducive”, he said. “Positive developments must be put on a more permanent footing.”

The US designation applies to seven Houthi officials including Mohammed Abdulsalam, the group's spokesman and chief negotiator in all UN-led peace talks since 2015, political adviser Abdulmalik Al Ejri, and financial figures.

Placing Mr Abdulsalam on the list "means the 'road map’ talks ... negotiated with the Houthis for more than two years is now closed," said Baraa Shiban, a Yemen expert and associate fellow at the Rusi defence think tank.

"Washington has now dialled the reset button and taken all discussions back to square one. Simply because the road map that Saudi Arabia was negotiating with the Houthis includes clear incentives that the Houthi leadership would see beneficial – financially – if they had agreed to a final resolution," Mr Shiban told The National.

With heavy economic sanctions being imposed, the "Houthi will not be benefiting from any financial aspects of the deal".

The move also "isolates the Houthis politically, making it challenging for all Yemeni political groups to establish links or initiate talks," he said.

Regional co-operation for lasting peace
Mansour Rajeh, deputy governor of Yemen's central bank, said the designation might not have a huge impact on the population in Houthi-held areas if the government worked with the US and other allies.

"This could be in the form of an emergency room that handles information from the field in co-ordination with the US. We can put a framework that targets the Houthis and avoids hurting civilians and families living in Sanaa," Mr Rajeh told The National.

He said the process was complicated and would require a lot of co-ordination.

"We are having these discussions with the US Treasury in a way that shares data and ensures oversight. Donating to aid organisations requires auditors and the Houthis will not allow this. They arrest people for gathering information in the field, accusing them of treason – they’ve even arrested auditors," he said.

Mr Rajeh suggested that the main revenue source for the Houthis was fuel, so should be the main target of the sanctions.

"There are things that can be done to hurt the Houthis economically, by cutting them off from their resources. If applied properly, the sanctions could be effective," he said.

Officials in the Yemeni government told The National that the success of the sanctions would depend on the co-ordination of major regional powers to ensure they are linked to a clear mechanism for attaining peace.

"It is an important and long-awaited step to put an end to the crimes and violations committed by the terrorist Houthi militia against the Yemeni people," said Maged Fadhaeel, Yemen's deputy human rights minister.

The US designation could put pressure on the rebels in peace negotiations and "force them to make concessions, especially if there is an international and regional consensus to implement it firmly", he said.

Deteriorating humanitarian situation
Yemen's humanitarian situation is "perilously fragile", with more than 19 million people in need of life-saving assistance and at least 17 million going hungry, said Eri Kaneko, spokesperson for the UN Office for the Co-ordination of Humanitarian Affairs.

Almost 90 per cent of the country's food supplies are imported, most of it through commercial channels.

"Constrictions in this supply – whether intended or incidental – will have devastating impacts on millions of people," Ms Kaneko told The National.

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